Mortgage Comparison Calculator
Determining which mortgage provides you with the best value is more than simply comparing monthly payments. Use this calculator to sort through the monthly payments, fees and other costs associated with getting a new mortgage. By comparing these important variables side by side, this calculator can help you pick the mortgage that works best for you.
To help you see how much you can afford, there are two simple rules that lenders use to determine how much of a mortgage you qualify for. These rules are governed by Canada Mortgage and Housing Corporation (CMHC) which is Canada's national housing agency and Canada's premier provider of mortgage loan insurance, mortgage-backed securities, housing policy and programs, and housing research. Visit them at http://www.cmhc-schl.gc.ca
The first rule is that your monthly housing costs should not exceed 32% of your gross monthly household income (GDS). Housing costs include monthly mortgage payments, taxes and heating expenses. If applicable, this sum should also include half of monthly condominium fees.
Secondly, your entire monthly debt load should not be any more than 40% of your gross monthly income (TDS). This includes housing costs, and other debts such as car payments, personal loans, and credit card payments.
Before you begin using our calculator below, please visit CMHC's GDS and TDS calculators to see if you are in line with their qualification limits:
- Mortgage amount
- The total amount for this mortgage.
- Interest rate
- The interest rate on this mortgage.
- Mortgage amortization
- The number of years over which you will repay this mortgage. The most common amortization for mortgages are 20 years and 25 years.
- Any fees that should be included in the APR calculation. These fees can vary by lender, but at a minimum usually includes prepaid interest.
- Mortgage payment
- Monthly principal and interest payment using semi-annual compounding.
- Equivalent monthly payment
- The sum of periodic payments for a year divided by 12 months.
- Accelerated weekly and bi-weekly payments
- Accelerated weekly and accelerated bi-weekly payment options are calculated by taking a monthly payment schedule and assuming only four weeks in a month. We calculate an accelerated weekly payment, for example, by taking your normal monthly payment and dividing it by four. Since you pay 52 weekly payments, by the end of a year you have paid the equivalent of one extra monthly payment. This additional amount accelerates your loan payoff by going directly against your loan's principal. The effect can save you thousands in interest and take years off of your mortgage.
The accelerated bi-weekly payment is calculated by dividing your monthly payment by two. You then make 26 bi-weekly payments. Just like the accelerated weekly payments you are in effect paying an additional monthly payment per year.
- Annual percentage rate (APR)
- A standard calculation used by lenders. It is designed to help borrowers compare different loan options. For example, a loan with a lower stated interest rate may be a bad value if its fees are too high. Likewise, a loan with a higher stated rate with very low fees could be an exceptional value. APR calculations incorporate these fees into a single rate. You can then compare loans with different fees, rates or different amortizations. All mortgages calculated with this calculator use semi-annual compounding, all APR calculations use annual compounding of interest.